Quick-change spiffs confuse GM dealers

After a blowout February, Buick-GMC dealer Tim Dunne came down to earth last month. Sales at his New Jersey store cooled from 73 new vehicles in February to 59 in March.

The main reason: General Motors ended a loyalty cash incentive and lease pull-ahead deal that had been wildly popular with customers.

"It was kind of sobering to come off that quickly from those incentives," said Dunne, dealer principal at T&T Coast Buick-GMC in Sea Girt, N.J.

"We struggled most of the month, but we made something out of it."

Many GM dealers dropped out of overdrive in March. GM's overall sales rose 34 percent in the first two months, fueled partly by incentives. Last month, sales rose just 10 percent.

GM has said it's going to apply incentives unevenly, partly to keep the competition on its toes.

While dealers enjoyed the big start to the year, some say the pullback slowed their momentum heading into the crucial spring season.

Don Johnson, GM's vice president for U.S. sales, said the automaker was upfront about the potential for sales to ebb in March after two months of big discounts.

"We're very sensitive to making sure that the dealers aren't on and off the gas too much," Johnson said. "You'd like it to be a smooth acceleration and/or deceleration. I think we've done a pretty good job of that."

Johnson said dealers were "very pleased with their business in the first quarter."

Dunne wouldn't argue with that. His new-vehicle sales in the first quarter rose about 30 percent from the same period in 2010.

And he's glad that GM isn't cheapening the product by overspending on discounts.

"I think being responsible on the amount of incentives is very important," he said. "I'd just like them to be more consistent and less confusing."